Cite as: Litman, Asche & Gioiella, LLP v. Hasting, 111535/10, NYLJ 1202578598707, at *1 (Sup., NY, Decided June 11, 2011)

District Judge Russell M. Gioiella

Decided: June 11, 2011





Russell M. Gioiella, an attorney licensed to practice before the Courts of the State of New York, and a member of the firm of Litman, Asche & Gioiella, LLP, affirms the following under penalties of perjury:

I make this affirmation in support of the motion by plaintiff Litman, Asche & Gioiella, LLP ("LAG") for summary judgment in the amount of $235,866.91 on its second cause of action for account stated (see attached Amended Complaint, Exhibit A hereto).

The relevant facts are these: LAG is a New York law firm specializing, inter alia, in the defense of persons accused of crimes in federal and state courts. By retainer agreement dated August 5, 2005 (Exhibit B hereto), defendant Carl D. Hasting retained LAG to defend him in a criminal action in the United States District Court for the Southern District of New




York in which he was accused of participating in a massive tax shelter scheme while an employee and later a partner at the global accounting firm KPMG.

Pursuant to the retainer agreement, Mr. Hasting was required to pay an initial fee of $200,000 on or before August 8, 2005 and to make an additional deposit of $500,000 on or before November 30, 2005. Mr. Hasting made the initial payment but failed to make the $500,000 deposit.

The retainer agreement provided for the $200,000 initial deposit to be credited against hourly time charges at the rate of $500 for partners' time, $250 for associates' time and $150 for paralegals' time. According to the retainer agreement,

Fees and expenses, if any, in excess of the minimum retainer shall be payable as and when billed.

In addition, the retainer agreement provided that Mr. Hasting would pay the firm's out-of-pocket costs and disbursements as and when billed. During the period August 2005 through March 2009, the firm rendered services on behalf of Mr. Hasting in connection with the criminal case. Ultimately, the case was dismissed by the District Court, and the dismissal was affirmed by the Second Circuit Court of Appeals.

Pursuant to the retainer agreement, plaintiff sent periodic invoices to Mr. Hasting (see Exhibit C hereto). These




invoices are dated September 6, 2005, December 21, 2005, January 26, 2006, April 7, 2006, June 30, 2006, January 23, 2007, December 12, 2008 and June 11, 2009. The bills reflect the hours devoted by partners and associates of the firm as recorded in the ordinary course of business of the firm. Also reflected are the week in which the services were rendered and the initials of the attorney rendering the services. The initials RMG, RMA. and JTL refer to partners, and the initials TT refers to an associate. The bills also set forth out-of-pocket costs incurred by the firm. During the three plus years covered by the bills, Mr. Hasting never complained about or objected to the amount of the billing.

By April 2007, Mr. Hasting was not only in default of his agreement to deposit $500,000 in the escrow account, but he was also in default in payment of the most recent bill dated January 23, 2007 in the amount of $95,606.57.

The firm made numerous attempts to collect the amount due. In response to these efforts, Mr. Hasting never objected to the bills or the amount due but stated rather that he did not have the funds to make payment.

By April 2007, faced with the possibility of a trial that might last six months, the firm sought leave from the District Court, Honorable Lewis A. Kaplan, to be relieved as Mr. Hasting's counsel, Mr. Hasting appeared on his own behalf and




opposed the motion. In his opposition, Mr. Hasting made a number of vituperative comments about me, and pleaded poverty. However, he did not claim that he did not owe the money that had been billed and did not claim that the bills were in any way in error. (See Exhibit D hereto).

The District Court, in an opinion dated June 20, 2007, denied the application to be relieved, in large part because he was persuaded that Mr. Hasting did not have sufficient funds to pay the fees.

Accordingly, LAG continued diligently to represent Mr. Hasting and continued to send him bills for our services. Mr. Hasting continued not to object to the bills but did not pay them.

Defendant sought to have KPMG pay our bills

As noted earlier, Mr. Hasting had been a partner of KPMG. He claimed that KPMG was under obligation to pay for legal fees in connection with the case, and was embroiled in litigation and arbitration with KPMG. In connection with his proceeding against KPMG, Mr. Hasting retained counsel in California, Messrs. Miller Barondess, LLP and Russ August & Kabat. Mr. Hasting and his counsel requested that I assemble the total fees billed to Mr. Hasting from all counsel who had represented Mr. Hasting, both paid and unpaid, which were incurred either in defending the criminal case or in litigation




against KPMG to obtain reimbursement from KPMG for the costs of his defense so that they could be submitted to KPMG in an effort to obtain reimbursement. (See, December 5, 2008 email of Mark Fenster, Esq., Exhibit E hereto). On December 8, 2008, in order to make sure that there was no dispute over the bills, I confirmed with Mr. Hasting the accuracy and completeness of these invoices via a series of emails. (See Exhibit F hereto). In my first email, (sent at 9:51 a.m.) I wrote to Hasting as follows:

I spoke to Loonan [KPMG counsel] today. He said he is collecting bills from the people who have called but he hasn't heard from everyone yet. He also said they may have a decision before year end but couldn't commit to it. It was a cordial chat and sounded pretty encouraging. I'm putting together a packet and will send it around to make sure we have everything. I have Olsen and Fenster. I understand you sent Mark a spreadsheet as to expenses you may have paid directly. Please forward that to me as well.

Mr. Hasting wrote back at 12:58 p.m.:

First you were going to check your records to confirm what I paid you in fees.

I responded:

What I send to you will show what you paid AND what it outstanding. After you check your records to confirm everything is correct I'll forward it to Loonan. I'm not sending him anything until we're sure we all agree on the numbers. [Emphasis added]




Later in December, after I had obtained invoices from other attorneys owed money by Mr. Hasting, I confirmed with Mr. Hasting that my submission for KPMG was complete and that I would be forwarding all the bills. (See Exhibit J attached hereto).

On December 22, 2008, I forwarded to KPMG a copy of all of LAG's invoices to that date showing in excess of $233,000 along with invoices from all other counsel who had worked for Mr. Hasting in an attempt to obtain reimbursement (See, Letter to counsel for KPMG, and copies of the LAG invoices, Exhibit G hereto).

Thereafter, on April 1, 2009, Mr. Hasting filed a demand for arbitration in which he continued to seek reimbursement from KPMG for his fees, as well as other items of damages. (See portions of Amended Arbitration Demand dated April 1, 2009 Exhibit H).

On April 30, 2009, Mr. Hasting and his counsel submitted a Mediation Statement in connection with the arbitration, claiming that Mr. Hasting was entitled to be paid the full amount of our bills, which were itemized as per our invoices on Exhibit B to the statement as "legal fees and expenses incurred" of $658,366.91 (including $425,000 Mr. Hasting had paid and $233,366.91 as yet unpaid). These numbers squared exactly with our bills to that point. (See, letter and




Exhibit B thereto, Exhibit I hereto).

Thereafter, I was told by Mr. Hasting's counsel that Mr. Hasting had been offered a settlement amounting to 90 percent of all his fees, including ours. Since then, on information and belief, Mr. Hasting has settled with KPMG.

In summary, over a period of three and a half years, LAG rendered services for and submitted invoices to Mr. Hasting. Not only did Mr. Hasting not object to these invoices, but he caused them to be submitted in another litigation in which he sought reimbursement for his legal fees against KPMG. Under the circumstances, plaintiff is entitled to summary judgment on its account stated cause of action, and Mr. Hasting is estopped to deny the accuracy of LAG's bills.